year after year. it's the reason why we don't have customers. we have members. american express. welcome in. good morning from new york, i'm chris hayes. president obama returns to los angeles today for a celebrity studded concert and fund-raiser. venezuelan president hugo chavez goes to the polls there. joining me, we have congressman peter welch, a democrat from vermont. chris rabb author of "invisible capital."

author of "entrepreneurial nation" and former deputy assistant secretary in the obama department and my colleague, j.j. ramberg author of "its your business" and host of msnbcs "your business." it's great to have you here. thank you, good to be here. >> if there has been one hero of this presidential election, it has been the mythic small businessman. republicans dedicated their entire con vens with we built this. democrats touted how their policies would help small businesses. it was on display in wednesday night's presidential debate when the words small business were mentioned over 25 times. >> we are helping small businesses. >> champion small businesses. the number of small businesses, i know what it takes to get

small business going. helping small business. >> encouraging small business growth lowered taxes for small bidses. through small businesses. 97% of small businesses. >> it's small businesses. a guy who has a small business. successful small businesses. >> those small businesses. >> all the praise for small businesses and their owners obscures the questions we should ask. what counts as a small business and what is their role in the u.s. economy? many of these small businesses talked about are anything but small. in order to avoid paying income taxes, they use sole propriet proprietorships and s-corporations. the owners file the profits on individual tax returns making the term small business about the number of owners rather than anything else. as a result, these small business owners include partners

of hedge funds. also, donald trump. >> under governor romney's definition there are a bunch of millionaires and billionaires who are small businesses. donald trump is a small business. i know he doesn't like to think he's small anything, but it's how you define small businesses to get business income. >> this term is driving me nut, i have to be honest. it's become so central. everyone celebrates small business. it seems to me, a term in search of an actual definition. there's no agreed upon definition. it could mean anything. it's like saying workers. that includes hedge fund managers and janitors because they both work. it's not a useful concept. reverse engineered to score a political point. it begins as it's business, but

it's small. it's great. it's not big business. big business is bad but it's business, it's not the state, the public sector. it's small, but it's business. what is a small business? >> it's completely misrepresented many ways. people use the term because it's easy to get behind small business. nobody wants to go out and say i'm against small business. this helps or this hurts small business. in terms of the actual definition, if you look at the sba, it's under 500 people. >> employees? >> under 500 employees. all of us agree, if you have 499 employees you do not have the same needs as somebody with four employees. it's very confusing. >> part of the reason of the force of the concept, i think about the laundromat or the diner down the block. i love the owner and the people that work there. they probably have 12 employees. you are great.

i want everything to help you but that's not necessarily what we are talking about. >> we are also have people in the same community who, let's say it's a latina who employs people from the community and a predatory lender, it's a small business, too. >> right. >> that's just me, you know? >> very good point. >> we have to get beyond the terms. i say starting with this show, we have a moratorium on the term small business. as a guy, i like unicorns. i don't say i like unicorns with horns. it's a given. 97% of small businesses are small businesses based on the government. >> fewer than 500 employees. >> exactly. you can fit all the ceos of firms in madison square garden. the rest of the businesses in the population of south

carolina. you are talking roughly 18,000 people who run businesses more than 500 people. the millions of businesses that generally are having a very hard time. so, it's not a matter of bigness or smallness. ultimately, it should be those businesses that help sustain communities versus those that prey on them. >> congressman, it strikes me this has become a thing that is political can't. you are never going to get up in the well of the house and say i proudly bring before today this bill is that going to stick it to small businesses. i mean, but if you say this bill is going to be great for small businesses whether or not it's the case, you give it this kind of legitimacy. >> you are right on both counts, i'm not going to stick it to small businesses. but, you know, it's not a term in search of definition. it's a term to avoid definition. that's the deal. everybody wants to be quote, for

business. some small businesses get the job done. most of the time, when talking small business, the sense of it is people who are in the business of their running. the owner, occupier, they are there getting their hands dirty and the job done. the truth is that we need big business and small business. small business does very well if some of the big businesses are doing well as well. there is an unwillingness to take on the definition of the role of government in big business in restraining anti-competitiveness practices. you really need both. in fact, it should be much more part of how do we build an economy that is sustainable, helps build communities and what is the role of government. >> in the debate, you saw mitt romney can no longer defend tax cuts for the rich. he wants to say i'm not for tax cuts for the rich, it's for small business. look at the definition.

under the definition of small business -- >> hold that thought. let me play mitt romney making that case where he says you want to raise taxes, that's fine. you think you are going to stick it to rich people. really, you are going to stick it to the beloved small business owner. check it out. >> mr. president, you are right with regards to 97% of the businesses are not taxed at 35% tax rate, it's a lower rate. those businesses, the last 3% happen to employ half, half of all the people who work in small business. >> okay. please respond to that. there is so much nonsense in that little bit of sound. >> first of all, the statistic that it employs half is ridiculous. let's look at it carefully. under that definition of small business, i'm a business. why? because i have written a book. i get royalties. that's business income. mitt romney cuts my taxes. now, i'm not going to hire

anyone. this idea that cutting the taxes is going to lead to job growth is absurd. in contrast, the president saying i'm for tax cuts but i am if you actually hire someone. >> my brain was soup as i was trying to sort through all these definitions. the sba, small business administration is trying to define it as a business with 500 people or less. it's not the definition being used here. the definition here is a tax status. in this study. >> this is where the fact is wrong. >> yes. thank you. >> all people who have pass through income, a company that is set up so you are not taxed at the corporate rate, it's the personal rate, those people employ half of the americans he's talking about. >> half of the people employed by small businesses. right. >> it's not the 3% he's talking about. the 3% employ a small percent of

that. when talking 54%. >> i see what you are saying. >> it comes from a study -- >> that was commissioned by the s-corporation trade group. i was reading the study last night. >> it says the correct thing. it's all of these corporations that pass through. >> i want to make the point, the study that is the bedrock for these statistics, this thing about small businesses and fractions you get, that study about s-corporations, a specific pass through income was commissioned by the trade group that they did for them. it's the foundation upon which we are basing these policies. >> i'm getting a headache listening to us talk. >> perfect. nailed again. >> i think that is what happened in the debate. average people sitting there are trying to figure out how are they going to pay the bills and where can they get a decent job. the jobs out there now aren't

paying the bills. inflation is going up. it's 1% or 2%, gas at four bucks a gallon, pay for college education, whatever it is. the talk on small business obscures, what are regoing to do in this economy to increase demand? demand is going to drive the profitability of small business. >> we have a survey about small business owners which was interesting. it was conducted by wells fargo. they say why are you not hiring, right? their number one hiring concern is the revenues won't justify adding employees. there aren't enough people, customers to sell things to because the economy is not very good. current state of economy, cash flow ability, go down to the bottom of that for new government regulations. >> after the debate, i spent a lot of time talking to small business organizations to say what was your reaction to this?

they had interesting statistics and ideas. then i spent a bunch of time talking to small business owners saying what did you think of the debate? you know what they said? i don't really care. what i care about is how i'm going to get more people through my door, increase my customers. what's my marketing plan. >> i want to talk about groups that speak for business like the national federation business. also, if we focus in on a definition of small business we can agree on, whether we should be helping them anyway. is it the case they play a special role in the economy after this. are game-changers. those ideas that start with us rolling up our sleeves... ...and end with a new favorite room in the house. and when we can save even more on those kinds of projects... ...with advice to make them even better... ...that's a game-changer in itself. more saving. more doing. that's the power of the home depot.

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trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. your plan is to take the tax rate on successful small businesses from 35% to 40%. the national federation of

independent businesses said it will cost 700,000 jobs. i don't want to cost jobs. my priority is jobs. >> that was a moment in the debate last night on wednesday night that almost made me climb out of my chair. this has become common place in the election. scott brown cited a study. what could be more -- businesses themselves are independent. it is essentially a right wing interest group that is out there to, you know, destroy democrats at every opportunity. i don't think i'm overstating things when i say that. it's like me getting up here saying the occupy wall street group came up with a study saying, you know. it's not an independent source. >> these folks just don't hate obama enough.

if i was split from the u.s. chamber of commerce, it's the baby brother. >> they have been incredibly opposed to affordable care act and fought the obama truth. they thought the chamber of commerce was too soft. >> yes. >> on a more basic level, too, they oppose regulations of every kind. they oppose affirmative action. it's interesting. the corporations all filed. they support these things as necessary things for diverse and highly competent work force for the 21st century. it's radical. anytime anyone references that, it's a red flag. >> here is the irony. if you forget the statistics and talk to small business owners and say what do you need, almost every small business owner will tell you their biggest issue is

access to capital. how do they get loans? how do they survive the valley of death? the biggest place to help them is the small business administration providing the loans. three of the people that spoke at the republican convention received loans from the sba. the president increased the loans they are providing. he increased the limit from $2 million to $5 million. let's have a real debate. >> they expanded the category of enterprises and the amount of loans. >> that's true. >> the sba works with local banks. the smaller the bank, the better. i think the whole debate on small business is a metaphor for big, bad government. democrats always have a burden of trying to convince people what we are trying to do can be in partnership with creating jobs and helping businesses.

to the extent the government is the enemy. so, when we talk about small business trying to provide reassurance. it's what president obama is trying to do. we want to be your partner. when they talk small business, they are pegging us as the one who is the enemy. >> j.j., do you agree with what he said? you spend all your time talking to small business owners. the category is so murky. i watch your show and i have a retail shop and seven employees. >> access to capital is an issue. i don't find it as the biggest issue. i think the nifb does say this. in my expeernls i agree with it. a lot of people aren't going out trying to get loans because they are not sure they can pay them back. sba increased the number of loans but there are a lot of issues with banks being able to

issue loans to small businesses. that's the issue. >> sba doesn't give money, it just guarantees loans. you have to go to the local bank to qualify. there are a ton of business owners as you know, who don't have the collateral or good credit to get a bank loan and then get a guarantee. >> talking about regulations, there are regulatory issues making it harder for banks to loan. >> can i ask this question? why should i care? we all presume that helping small business is an obvious policy goal. the government should be doing -- you touted the small business administration. we don't have those subsidies for other loans. we do for students. what is special about small business that we should be concerned with its survival either way?

>> most businesses are geographically small. they are small scale. there's a number of people they employ and also their range of services and products. they are often neighborhood, maybe town, city based businesses. if they are going to employ people, it's people from the local economy. that is inher antly good. if a business comes in and hires from outside, i'm talking the suburbs versus inner city philadelphia. i'm concerned about businesses coming into my city. i'm interested they employ people who are chronically underimployed. that is the biggest bang for the buck. if we want a policy, target areas where you have the greatest distress in terms of economic socioissues. >> we are quickly going to take a break. and every day since, we've worked hard to keep it. bp has paid over twenty-three billion dollars

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you worked in the obama administration on a lot of small business issues, wrote a book about entrepreneurship. we are talking about the politics of the term small business and the economic role of small businesses and finally, whether we should actually be crafting policy around small businesses. >> when it comes to economic growth, not all small businesses are equal. the ones that created the most jobs have come into existence in the last five years, the start ups. clean technology, biotechnology. it's started by immigrants. let's have immigrant reform, investment laboratories, it's much more comprehensive how to

foster start ups than cutting margin on wealthy individuals. >> the other staff we get is small businesses creating most of the jobs. when they are 99.7% of the businesses that's not surprising. it's just statistical. the places where you see more job creation is in small start-up firms. the first five years is where you get the most. there's an interesting trend happening in the economy. firm creation and start ups have declined, in a disturbing way. i think we have a chart of new businesses. a number of u.s. companies less than a year old starts to decline. it declines not when the socialism of barack obama is imposed on the nation but back in 2006. that last part of the chart is striking. there is something happening. it might be that that's when the housing bubble bursts and we have a long recession and people

aren't starting businesses because they don't think there's going to be customers for them it's important and a genuine problem. >> no, no -- what it takes to be a business is to print a business card in this country. most businesses are sole propry ters. if you say you are a businessman, you are a businessman. it's a good thing. the challenges, we don't need more entrepreneurs in this country. we need a more inclusive, better trained entrepreneurial class. if all these universities, corporations say we need a diverse work force, some of those people are going to start their own businesses. we want them ready. if they are listening to donald trump, we are screwed. he believes all you need is a great idea, good attitude and hard work. >> this is the story we heard.

>> it's the unholy trinity of business in america. there's no statistical, no data to prove that's enough. everything else is capital. a perfect example is the five things that are the only statistically significant things that improve your chances in business according to the kaufman foundation. they do studies all the time and are respected by democrats and republicans alike. they say it is access to sufficient start up capital, a formal education, choice of industry, which is what you were talking about. previous work experience in a relevant field and previous work experience in a family owned business. they are the five factors that improve your chance in business. >> we agree, there's a cult of entrepreneur. everybody wants to be a entrepreneur. we think of richard branson or mark zuckerberg, which is not

for most of us. it's hard and scary and you are up at 3:00 in the morning. it's important to support small business for job growth and innovation comes from the small businesses. i would like to do a study of big business and small business and try to get the same thing through, the same idea or anything through and see how long it takes through a small business and a large business. >> please. >> i thought your point was good. we were talking about politically, we dumb it down and act as though they can pick the winner small business and loser small business and it should be at the focus of start up business like immigration reform where you are going to get people who have an incredible amount of energy or education getting increasingly impov herbed. or infrastructure. we need more broad band in

vermont for folks to come up from new york. these are macro policies that only government can do. the micropicking whether you are going to be successful or you are is bad. the macro is where you need governmental investment and these things give somebody a shot. >> there's one more area of policy that no one talks about. there's been a consensus on since reagan, anti-trust policy. we do not care about anti-trust enforcement anymore. there's a few exceptions. i want to ask about, do we actually -- do we actually value small business in any real way in a world of walmart and amazon, right after this.

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there was a tradition that was proconcentration. get rid of small businesses. this was a left/right belief where the big con sol day tors and the socialists thought, yeah, big enterprises. we can organize the workhorse. at the end of the new deal, there was a turn toward much more anti-trust and an explicit policy of trying to create competition and try to preserve small businesses. i was reading about how in france they don't allow large book sellers to sell under cost the way amazon does. that's just something we would never do here. it's amp thet cal to the american belief and the price system. you can't tell people the price they can sell books. if you were serious there's a social value to small businesses as small, independent book sellers you could do that. another area of policy is patent

law. it seems those are two big parts of american policy that don't get discussed. >> well, my brother and i started a business in the mid-'90s in chicago. we eventually filed for two patents. we got them after our business was shut down. >> sad horns. >> we owned so much in legal fees. if anyone came up against us, we couldn't afford to go after them. >> that's the issue not talked about. not only do you not get the patent, you have to defend the patent. >> what does that mean? there's interesting reporting being done on this and hasn't bubbled up. >> i'm a small business owner, i get a patent. you big business are violating my patent. i have to fight you. you have deep pockets, i don't. who is going to win?

>> plus the microenterprises that are patent trolls, they sue people for patent information. >> this is in vermont. it's right. i have been talking to business folks there that have patents and they are getting sued constantly. this is an area where government should provide clarity. if you have a patent it should be resolved and settled quickly. you have to give up what you are earned. >> the administration tried, it's a funding issue. it's underfunded to get them out. >> 8:36 is when we got to patent office funding in the show. >> it's important. >> i know it's important. >> starting a small business is really hard. saying that cutting taxes is great but it's not that easy. if we are going to be competitive, we have to care about infrastructure, immigration, access to capital,

consumer demand. it's hard to talk about in a debate, but it's reality. >> we talk policy frame works. the number of u.s. jobs in new companies over the last four administrations going back to george h.w. bush. my point is marginal -- it's very hard to look at that and tell a story about marginal tax rates as the thing that is defining. obviously, you have seen high levels of -- >> you know, i want to make a point about new companies. we talk about small businesses, the savior, we are going to create jobs. what people don't realize is as a small business person, your goal is to not hire people. your goal is to keep your expenses down as low as possible while creating revenue. >> labor is very expensive. it's the biggest part. >> it's very expensive. with the internet, all this technology, it's easier to run a

company without hiring as many people. >> my colleague, j.j. ramberg, co-author of "it's your business" tips to transform your business and host of "your business" here at 7:30 a.m. eastern. americans face pressing issues aside from the economy, we just didn't hear from them. that's next. ♪ lord, you got no reason ♪ you got no right ♪ ♪ i find myself at the wrong place ♪ [ male announcer ] the ram 1500 express. ♪ it says a lot about you. ♪ in a deep, hemi-rumble sort of way. guts. glory. ram.

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wednesday night, there wasn't a single word mentioned about the latter. thursday between joe biden and paul ryan voters will get a chance to hear what candidates have to say about a host of issues beyond budget, policy and health care. things like voting rights, women's rights, topics that were omitted last week between president obama and romney. the issue of sensible gun laws. the first presidential debate took place a short distance from aurora, colorado. a victim had a message for the candidates in an ad that airs during the debate. >> this past summer in a movie theater in colorado, i was shot. shot in the face and neck. but i was lucky. in the next four years, 48,000 americans won't be so lucky because they will be murdered

with guns in the next president's term. enough to fill 200 theaters. when you watch the presidential debates, ask yourself, who has a plan to stop gun violence? let's demand a plan. it didn't get an area. joining us is comedian chris. john warner and rebecca, contributor to the magazine. i feel of two minds about the debate. focus is good. depth is good. i was appreciative they allowed depth on the issues they talked about, but frustrates there's only so many of these. one is foreign policy. in terms of domestic policy, the next debate is basically it and the vice president debate. i feel there's a lot of stuff i want to hear them on.

the other issue i'll say then shut up. i'm curious what you have to say. the other thing i wished had come up, there's a ballot initiative in colorado that hasn't gotten a lot of attention here. amendment 64 to legalize marijuana in the state of colorado. 51% in favor, 40% not in favor. it's a big deal. it's probably going to happen in colorado. i genuinely wanted to hear mitt romney and barack obama say where they were on it. >> one of the things that strike me, i hear the dichotomy on we went deep but didn't touch on the social issues. we don't talk about the social issues we write off as soft are economic issues. when talking about people's ability to participate fully until the economy, you are talking women's rights,

reproductive rights, drug laws. you are talking issues like prisons that we didn't talk about. gun laws. >> there ends up being a mars/venus distinction. >> right. in fact, what we never get to is the important thing we need to acknowledge and address, they are economic issues, the heart of economic issues across the country. >> drug laws create an entire generation of people because of things they have done and regret holds them down for the rest of their lives and creates a distraction. if life has not been kind to you maybe sometimes for a week or two, it's easier to make the choice of going on to the black market and selling drugs. next thing you know, you are stuck. if you have done time, it's difficult to have a life. it's not a race neutral issue, it's creating a group of people. it's not a social issue, it's the fabric of the nation. >> it's one of those issues that

when we talk about these independent voters, you know, legalization of marijuana is something that libertarians talk about, that tiny little middle when we all say how could there be people undecided? that issue is one that resinates. >> it's showing up. i'm amazed by the polling in colorado on this. i think this is a place where we have paid a lot of attention on this show to the amazing evolution of public opinion on gay rights, but this is on legalization is another place. there's a real change happening. >> congressman are you ready to come out here? >> we have medical marijuana in vermont. what struck me is the debate, the presidential debate mirrored congressional debates to say we don't talk about anything. we don't have that conversation. >> congressman, we talk about nothing -- >> it's so different from the vermont legislature where the

committee would be in the same room at the same time and over time you build up trust and have confidence that the person you were talking to wanted to make vermont a better place. in washington, it's all talking points and poll tests. we don't sit together in a committee room, the folks have an agenda. the contraception issue of all men talking about women's issues. the inability to have adult conversation about issues that are tough and to have a certain amount of mutual respect and trust debating prisons or legalization, it's not anni ize issue. the debate mirrored that. it's a breakdown in congressional functioning. >> there's no formal issue where they are walking down the hall and have the real conversation? >> no. it's terrible. i started having lasagna dinner parties at my house. we had republicans over.

it was such a big deal, it was on the news. it was costco lasagna. >> delicious. >> hold that thought. as a sitting member of congress, what would you like to see addressed in the vice presidential debate and the issues about contraception after this break. there are projects. and there are game-changers. those ideas that start with us rolling up our sleeves... ...and end with a new favorite room in the house.

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we are talking about the omissions, which are sizable from wednesday night's presidential debate and as an intervention to what we want to see in the vice presidential debate on thursday and the one other debate between the two presidential candidates. given how much contraception reproductive choice has been this year, it was striking to me that that was nowhere to be found. >> especially since the gender gap. it's striking obama didn't bring it up. the gender gap is crucially

important as to whether or not barack obama is going to win a second term and it's very much on his side. one of the things i was perplexed about, it's not that he didn't attack romney on a variety of issues, he didn't offer a positive version. it wauz free form structure to the debate. it wasn't directed much. i wanted him to talk positively about his stance on women's rights. >> bring it up out of nowhere. talk about lily ledbetter. it's working for him crucially. it was surprising to me. >> i think to double down that -- did i just say that? kick me off the show now. >> i'm throwing you under the bus. >> the other thing people want to look at in this election is not only mitt romney, but the party that mitt romney serves and with the issues of choice and the legislation going on not only in washington but around

the states when obama gets called up all the time on he didn't get this done or this done or this done, it's because of this destructive congress. when you have mitt romney who is going to lead this party, especially not the party of allen west and all these people who are crack pots on science and women's issues. that was a real chance for barack obama to say i have defended this whole time. >> and legislation that lets you take care of yourself. >> that to me was very striking as well as someone who works in this body that has about 10% approval rating from the american people. how do you -- >> and falling. >> exactly. how do you talk about -- i mean are you struck by how little congressional obstruction?

>> essentially, romney just -- it was a game changer when he said he wants to tax the rich, regulation is essential. he cares for the poor and the elderly. what planet are we on after the two years he went through? that was when obama -- debate is about an emotional tone and connection and the issues we talk about are in service of that. that was the opportunity for obama to hold him accountable. what about mitch mcconnell who said his goal is to make me a one-term president. what about the debt ceiling where you push me over the cliff with no plan. what about the budget plan where we were about to shut out the lights in government? there was a fight for failure there's been the core approach of the republican leadership. i think that was an opportunity for romney to say something.

congress is dysfunctional. his republican leadership that had a plan that incidentally worked for quite a while. if nothing gets done, most people who are getting stuff done throw their hands up. that was the moment where i thought the president had the opportunity to show that he was a fighter. that's what people also want to know. when romney stole the show by literally turning upside down what his positions have been, it was time to hold him accountable. >> i can't make sense out of it. it's been said in some places and no, not by me that obama actually, this has been said by people that maybe he's not very bright. the other night i actually wondered what's wrong with him. i don't think it's because he's afraid to be an angry black man to say the things you were talking about would not have looked angry, just intelligence. i suspect he's used to being riding on that charisma of his.

i think he thought standing there and being his larger than life self would take care of things. >> there's a few other theories about this. steve schmidt worked on the 2012 reelect bush. the president always has more important things to do. when you say you need to go to debate practice and he says turkey is about to go to war. i think preparation does matter. i think we saw that a little bit. >> would he have practiced for these? >> yes, yes. >> i just want to say, the one thing they should practice if their advisers didn't know this is what it's going to look like on tv. that's the screen. i was surprised. the network i watched, i don't know which it was showed a split screen the entire time.

when the president is taking notes, he has no idea. if you see that in advance, shot it like that, he would not have done that. i'm sorry. >> don't apologize. i want to hear what else we should be hearing thursday. i brought your stuff. you don't have to do this. yes i do. i want you to keep this. it'd be weird. take care. you too. [ sighs ] so how did it go? he's upset. [ male announcer ] spend less time at gas stations with best in class fuel economy. it's our most innovative altima ever. ♪

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let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. hello from new york. i'm chris hayes. i have peter welch from vermont, john a columbia university professor and rebecca of salon.com. we were talking wednesday night's debate. what wasn't in the debate? after the debate was done, i thought that was an in-depth look at three issues, budget and tax policy, medicare and the affordable care act and a little bit about dodd frank.

those are the issue that is are central to the beltway of reporting about the economy. very little about jobs and jobs creation except how regulation kills it and small business references. there was a panel plea of domestic policy issue that is are incredibly important that were not talked about. there's only one more debate that includes domestic policy. we have thursday night's vice president debate. we are talking about what was not in there that we would like to see. we talked contraception. i talked gun control and the medical marijuana ballot initiative that is in colorado that's polling with majority support. as someone in congress, are there issues you are tracking or working on or thinking about that weren't touched on wednesday night and aren't getting talked about in the campaign that is focused on just about two or three issues? >> income and equality. that's the big one for the

country. the challenge we have is this country is having a declining middle class. there's all kinds of reasons. we can talk as though there's a magic bullet but income and equality is rising. the wealth that's been created has gone to the top 1%. people know it. they are insecure and anxious about whether their kids are going to make it. parents thought they had retirement security with the equity in their home. the average kid in vermont graduates with $30,000 in debt. what are the structural issues that are going to get us on track where we have an expanding middle class? they did not talk about that at all. it use back and forth on taxes. >> gun control. you know, you have economic disparagy leds to crime. you are a woman and can you afford to have a child or not.

you and your domestic partner trying to get health care. all of it plays into that. that's the part that is, i think, glaring to all of us. >> i was surprised that student loans weren't talked about. it's another area obama and the administration had something positive to say. they had a weird conversation about schools where mitt romney said i like great schools. >> great teachers. >> yeah. i would add to that. that's very important. labels matter. i'm not sure if there's an official name but you are talking the general problem, the mismatch between what passes as a basic education and a middle class existence. it's a huge problem. maybe 30 or 40 years ago, it was a euphemism. now it's a problem. the television show, "breaking bad." >> no one talked about "breaking bad." >> then they could have talked about the "jeffersons."

we have a group of people going to high school and coming out unemployab unemployable. it's a huge problem for the nation. it's no longer anything local. i would like that talked about. it's about education and job preparation. community college is huge and barack obama said a little something about it. it was easy to miss it. i missed that in this debate. anthropologists would have been shocked it was so much about taxes. taxes are interesting but there's more. >> the tax debate has gotten very, very focused on very small in certain ways. the tax debate isn't embedded in the broader issue. the prospects of the middle class, income and equality. the other thing that did not come up and i think will not come up in any of the debates and it will destroy me that it doesn't. the single biggest most important issue for the next generation which is the client.

it's absence from this campaign, it's a really frustrating maddening, depressing fact about where american poll sicks is in terms of confronting what will be, in my opinion and the opinion of a lot of people, scientists that study the matter, the single biggest issue. here is mitt romney in october, 2011 flirting with climate denialism. >> my view is we don't know what's causing climate change on this planet. and the idea of spending trillions and trillions of dollars to reduce co2 emissions is not the right course for us. >> i want to hear someone play that tape for him. i want to hear the candidates have it out over what are you going to do? do you, mitt romney, accept the science that the planet is warming. if it is, what are you going to do about it? >> why can't the debate be pointed in that way?

>> that gets to the format. my colleague, rachel, said she thought the debate format died. the debate format is going to be different in the vice presidential debate and the next presidential debate which is a town hall. hey, let them go out it. >> a different moderator might have left us with different feelings if somebody reigned it in and said you are not answering the question. who knows. >> i think it would have happened a lot. certainly, if a moderator said here is the question you need to answer and phrase it in a different way and arched his eyebrows and waited. what happens with debate team, there's no reason it couldn't have been that hard as in "hardball." it's not what happened. >> you are right about climate change. it's a huge issue and it's about the energy policy and the

question of whether we are going to be in denial about it is threatening to the planet. it takes a certain amount of confidence we have to project to say this is a problem and in taking it on, through efficiency, through clean technology, we can create jobs, wealth and make a better planet. there's an economic opportunity here. vermont has been, we believe in it. we believe in efficiency and alternative energy. my wife is a total energy nerd. >> lack of carbon footprint here. >> i think the doubly depressing thing is not just not mentioning climate and carbon, the rhetoric around energy. >> energy projects have failed. it's a lie. half of what you funded are businesses. that, i was distressed that nobody responded. >> we are going to fact check

that one. that was the most agregregious . it's totally, completely absolutely 100% -- we'll do a fact check on the numbers in a second. >> i was going to say that, in this format, there was time to actually get to some meat of an issue, you bring it up in this debate. as we go down the line, you have three minutes and it becomes boom, you are out. it becomes that. >> what struck me, it was very beltway centric in the fact that the long term fiscal health of the country is the central issue for the people that work in washington think tanks that are staffing politicians that exist in the washington media environment. it's not the number one issue for american -- >> real quick, i'm sorry. i watched the debate with 400

people in the room, comedy fans, regular folks, they paid $8 to watch the show, who are the 47%. we came off that tape, a week of it. those people really felt like why wasn't that addressed? they talked about it. we had a discussion. that is us. that is the biggest thing, half of the nation was disregarded by romney and that doesn't come up? wow? >> that was probably the most striking thing from the moderator, the president, mitt romney himself. he might have brought it up. he was on handy the night after it. i hope we see whoever is -- that the people who are moderating the next debates think okay, we have that territory. it's been covered. there's a lot of stuff out there that we need to get the candidates on the record on. it's the opportunity that you never have when you are covering a campaign. i would love to have every candidate and on the record of a variety of issues.

peter welsh from vermont, lizz thank you for joining us this morning. "the new york times" is confronted over the use of the term illegal immigrant. that's next. with the spark cash card from capital one, sven's home security gets the most rewards of any small business credit card! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back on every purchase, every day! woo-hoo!!! so that's ten security gators, right? put them on my spark card! why settle for less? testing hot tar... great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? here's your invoice.

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♪ immigration was another issue we didn't hear about in the presidential debate despite the presidential role. in spite of the president's dramatic move for temporary legal status for immigrants under the age of 30 brought here illegally when they were children. monday, romney told the denver post, he would not cancel it

under the new policy saying quote, i'm not going to take something they purchased. this left open the question of whether romney would continue the program itself. hours before the debate on wednesday, a romney campaign aid sent an e-mail to "the new york times" clarifying his comments. they read we are not going continue obama's program. we are going to replace it and only honor visa's issued. romney has had an interesting relationship to immigration politics, one i would like to see him reckon with. romney repeatedly moved to the right on issues. his most extreme position and the one that helped him win the nomination the most was the rightward move on immigration. romney claimed rick perry was creating -- he favored making things so hard for undocumented workers they would self-deport. romney signaled to the republican base he shared their views on immigration in the

language he used to talk about it. >> almost half the jobs created in texas were created for illegal aliens. instate tuition for illegal citizens. giving tuition breaks for the kids of illegal aliens. four years of college. you can't have any illegals working on our property. i'm running for office. >> the word illegal continues to be used because the word modifies the person, not their status. it's why journalists wts "the new york times" and other news outlets to stop using the term illegal immigrant. here he is making the plea last month. >> it's time we retire the word and the term illegal immigrant referring to people. it's not only an inhumane term, it is a political term. it is an unfair term.

it is an inaccurate term. >> jose antonio vargas is with us at the table now along with journalist brook, co-host of on the media and broadcast on public radio stations and the country. and need to know anchor add latino usa. i have been looking forward to this conversation all week because i think it's such a profound and intense and loaded question about what language we use and how the language we use sets the terms of the political debates. i want you to make your case, first of all, jose, for why news outlets like "the new york times" or the associated press should get rid of the term illegal. >> we have had an open, transparent conversation and i really appreciate her for doing

that. you know, in our call in defending the use of the term, readers won't benefit if "the new york times," you know, stop using this. my question becomes which readers? as far as i'm concerned, the use of this term, illegal, underscores the nature in which the media talks and discusses this issue. it's a very -- the way we have talked about it mostly has been very problem oriented. >> that's interesting. >> how do you, in some ways, this is from somebody traveling around the country in alabama, arizona and georgia. the conversation starts with illegal and ends with illegal. that's all it goes to. again, the conversations i have had with people looking me in the face talking about these illegal mexicans. very fluid conversation. you stop people and say not all

undocumented people are mexican. it's been fascinating for me, once people actually face somebody who they think -- >> right. >> oh, you're illegal -- no. you don't have papers? we have so largely dehumanized this. our job is being more descriptive, you know, in the way we use this term. maria, who has been fighting this fight, you know, as a journalist for many years who happens to be latina. i don't think this is simply a latina or latino issue. it's an american issue. >> maria, the argument they made and the times standard folks made, we tried to get folks from "the new york times" on, they couldn't make it work. you know, it is illegal that the

transgression of entering the country is against the part of the law in the united states code how you enter the country and people have broken a law. this is a straight forward description. undocumented, that carries its own. it's doing its own work. undocumented is neutral as well. undocumented communicates, it has its own affect, which is to communicate this as bureaucratic. this is an oversight, if you are undocumented. >> so, the issue really concerns all americans. using language correctly. i'm going to ask you a question, chris. >> please. >> do you know somebody who has broken the law? >> oh, yes. i don't think i know a single person who has not broken a law. i think it's true of every american. >> say you have a friend whose broken the law driving, broken the law in terms of not paying taxes, broken the law in terms

of being a bad father, delinquent father and not paying child support. now, your friends are an illegal driver, illegal taxpayer and illegal father. no. i do what jose does. it is not a latino issue or immigrant issue. frankly, it's not even an american issue. it's a worldwide issue. who told me not to use the term illegal? it wasn't a radical professor. it was elle who could not be anymore different than me when i saw him, when i worked at cnn and i took the opportunity to ask him, as a journalist, what should i do. nobel peace prize winner, survivor of the holocaust, tell me, if there is an authority, you should be it. he said maria don't ever use the

term illegal immigrant. i said why? he said once you label them illegal, that is exactly what the nazi's did to the jews. they may have committed an illegal act. they are immigrants that crossed illegally. they crossed without papers and without permission. they are living here without permission, but they are not an illegal people. john is skeptical of that and you did a piece on that. i want you to weigh in after the break. time for "your business" entrepreneur of the week. he's the fourth generation leader of rosenwach. these tanks are shaped by hand with past century old tools. he says you don't throw out what works, you just build upon it. for more watch "your business" at 7:30 on msnbc.

we're talking about the term illegal immigrant and what kind of work it's doing in our politics and whether it's wo working against us and whether it's working against the interest of justice and equality. maria, you made a compelling case. john, you seem skeptical a little bit. you are a linguist so -- >> i feel, i don't know how much

it creates what i'm feeling. i hate to disagree with any of you, but in the case of these terms, it seems what usually happens is it's like flies have settled on you and the flies come back. so, for example, the term that we now revile retarded, nobody would want to use that term. if you think about it and wrap your head around it, it was a euphemism. the idea was to say somebody is slowed a little bit. then the unpleasant associations settled down. for example, think about special needs and what that meant when that term was composed. it was elegant, it was beautiful and respectful. face it, the same associations have settled down. i worry, if we create a new way of referring to it, the problems are going to settle down. african-american 20 years ago, the idea was to use that term instead of black. look how that's gone.

if anything it looks dainty, something somebody came up with for certain reasons. it hasn't had the effect it was supposed to. i worry changing the term is less important than trying to change the policy. >> we are in profound ground. the question is, is it the word that's doing the work or, you know, is it the politics and that that the word comes out of and the point that you say what determines the meaning of things. you can come up with a term that doesn't pack the same punch we think illegal has. but that can accrue negative means. >> the feelings are still in the air, then the term changes meaning like the old one did. >> brook, what is your feeling about that? more broadly, about these kinds of efforts to changeling wisic usage in the new york times. >> you never know what comes first. it is the culture changing or the media that's driving things

or a particular group that's making something happen? are they working in tandem going back and forth? you have phrases that have been successful through time but they keep getting relitigated. affirmative action versus quotas. pro-life versus proabortion and anti-abortion. you have the ones that identify groups. you have, you know, queer was once a bad word. then you went to homo sexual that was medicalized then gay but you don't call lesbians gay. there are things happening within the groups that you say well, people have a right to self-identify. when you are talking about a political or a legal issue or an issue that is or a word that is defined by a particular context, as in this case, it's way more

complicated. >> to push back on that, i think ho moe sexual and gay is a good analogy here. let me read "the new york times" style guide on gay. gay adjective. preferred to homosexual and political issues. use it in reference to sexual activity and psychological. do not use gay as a plural noun. gay is used as a last resort ordinarily in a hard to fit headline. we grant groups the ability to self-identify. that's why i use the term pro-life. people get mad at me for that. those who advocate for it say they are pro-life. i am not going to call them something other than they call themselves. >> i would 1,000% disagree with you here.

self-identifying who you are is one thing. within the black/african-american community, there are different views of what one seems like. you are walking around the issue. the other says black. black is black. say it. when you are talking about a political issue and if somebody says i want to define myself as pro-life, therefore my opponents are anti-life, you have allowed them to make the -- to win the argument before the argument takes place. i think issues are different. >> somebody who is gay and undocumented, i want to jump in this conversation. to me, the biggest -- >> i think of you as an illegal homosexual. >> what has changed, you know, it's interesting. we have this really evolving and growing immigrant rights movement, right? in the past three years or so,

more and more people like me are coming out as undocumented, right? it's an interesting phrase. i have come out twice in my life. i'm totally done. i'm not coming out about anything more. have you seen an undocumented person that has a poster saying i'm illegal? no. the memo that frank watts wrote in 2005 saying you should refer to people as illegal immigrants to criminalize them. if journalists argue this, argue using the word illegal as a neutral stance, are we done listening to frank? >> there is no neutrality. >> i am not talking a reference to people. i'm talking about defining an issue. >> i'm talking about real lives. let me talk about real lives. one second. >> okay. >> i believe, frankly, that if the american people understood

profoundly like talking to their neighbors, talking to the guy who delivers their pizza, talking to the person, the custodian at their kids school, if they actually spoke with them about the issue, i want to hear. then you would begin to hear stories that i saw, as you know, in a front line documentary that aired a year ago this month that uncovered because we went in with cameras, the truth about what happens, the real consequences when you label a people illegal. we have privately run detention centers with no legally binding standards and you have people that are illegal and being treated by guards as such being paid minimum wage. what happens is that all of the guards talk to the detained people, by the way, many of them with green cards in the country legally. >> right. >> okay? they say to them, what do you

mean you want food. you are here illegally. what do you mean you were raped, shut up, you are illegal. you have no rights. no. the consequences of what happened to our society. i care about this, chris, let me finish. i care about this because i chose to become an american. i made a decision to become an american citizen and gave up my mexican citizenship. these basic constitutional human rights issues about what defines us as a country benefit. this is for american. >> the question is the cause. are the guards, if the word is -- i mean the argument you are making is about the work, the psychological work that term is doing in making it okay for those guards to act that way which, i agree with you, i think that's a harder case to make. i'm not defending the detention center.

why does romney use illegal citizen over and over. >> you can stage with with undocumented as being poison. >> can you? that's the question. hold that thought. i want to hear more from you on this after this break. en we cred a $500 cream. for about $30 regenerist micro-sculpting cream hydrates better than over 20 of america's most expensive luxury creams. fantastic. phenomenal. regenerist. flavor, meet food. it's time for swanson flavor boost. concentrated broth

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we're having a fascinating conversation. i think it matters a lot not just for this issue, but all the issues we cover. language is so important in how we talk about issues it cuts off certain inquiries and opens other avenues. get press outlets to stop using the term illegal. we don't use illegal immigrant, we use undocumented worker. there's two reasons. one is undocumented workers don't want to be called illegal. i have a general disposition to call people what they want to be called, even when i disagree with them. also, let me read this piece

from 2007, which makes the case that you were making earlier. it's about the inaccuracy of the term. what part of illegal don't you understand. i'm an illegal driver, parker and walker. the offenses were trivial. i feel sure i can endure the punishments and get on with my life. good thing i ime not an illegal immigrant. nothing short of deportation will free you from it. that is the problem. i think there's just an inconsistency with how to apply the adjective with the noun. if the company has a super fun site, we don't say it's illegal. >> what do you think -- let me ask you this. what do you think, as a linguist, what do you think about the fact. my concern becomes the people do on that term, the number of undocumented people i encounter. they call themselves. i'm like what do we think about

that as a country. >> that complicates things. >> as a country, where you are saying go ahead and own it. then we are saying, as a country, we are going to allow this phenomena to exist, you are going to have a u.s. citizen children whose parents walk around saying i'm illegal. >> that term, for those people, means something rather different than what it means for us. >> yorn. it means powerless, disenfranchised, scared. >> the queer phenomenon. >> in terms of illegal driver versus illegal imgranlt. we have to change immigration policy. i understand about the discrimination and problems. but, if you are an illegal immigrant, the idea that some people have that that is more appropriate than illegal driver or illegal gardner, is that if you have immigrated without papers or whatever, while you are in that country that you

entered, the fact that you are in it is a state that continues. you are somebody who did come -- >> that's not legally true in this sense. it's not illegal to be in the country. the violation is the coming in, which is illegal. it's also civil offense. it's not illegal just to be here. the violation is the actual discreet moment of entrance. brook? >> i did not know that. i thought that your status, if you can be apprehended and deported for having come in, it would strike me that you would still be liable if you are -- >> teach people that. teach people it really isn't the fact that -- >> if you can be deported if they get you -- >> you are deported for the entrance. >> okay.

>> you want to go on the record. >> i just want to say that i prefer for a wide variety of reasons undocumented immigrant to illegal immigrant. i don't like defining a person as illegal. it feels and seems incorrect. you are not defining the action, you are defining the individual. but, so, i just i want to say that when it comes to issues, political issues, pro-life, pro-choice, i don't like to adopt the terms of the combatants. >> if being an illegal driver is the same, it's an argument to be made rather than it's quite simple. >> why it's not the same and i want to talk about what happens when you wage a campaign like this. if you end up creating the conditions in which the people you are waving the campaign against can't let you win, otherwise they look like they are choosing sides right after this break. ♪

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jose, you have been, you have been working to get -- >> i have been walking an uncomfortable conversation. >> about getting rid of the term illegal immigrant for news outlets. it's used in our public debate, the campaign, used in a very specific way. are you worried about the fact when something becomes litigated in the political sphere and you are "the new york times" saying we are going to make these style choices they are then in a position if they stop using illegal immigrant they begin looking like they are alienating? >> i'm not privileged enough to be a republican nor a democrat. i can't vote. >> right. >> so, all i know is i'm not actually, to me, the word illegal is an entry point. it's not a slice of the pie,

it's a pan. right? i'm notalking about -- to me, changing the term means actually broadening and changing and opening up the conversation, right? what is the difference between you and me? i don't have papers, you do. i don't have the right documents, you do. we are arguing about pieces of paper. when you look back at this 50 or 60 years from now, i remember getting into lou dobbs a few months ago, looking him in the eye saying when you use that term illegal, there are kids hearing that. what do you think that does to somebody? right? we are arguing about pieces of paper. i think that's so important to talk about this. look, as a journalist, i have been doing this for a decade now, i know because i'm friends with journalists, the last thing a journalist wants to encounter is to be told what to do and say. the pc police. this is about a matter of accuracy and description. are we being as descriptive as

we can be? >> you know what happens? if suddenly we -- i wonder what you would think about the conversation if we then, not that i do this all the time and it's going to sound really out there. many people said who were the first illegal aliens, the first in this country. >> the settlers. >> the pilgrims. call them that. no, you don't want that to happen. on the issue of style, who is in the style meeting. with the demographic change that is occurring in our country, that diversity in the media must occur. >> two papers have styles. don't use them. it's indicative of something, the miami herald -- >> the "huffington post." >> those two newspapers say something about the business decision of who their readers are. they are doing it for the benefit of the readings. what you should know for the week ahead next. ust have to firt these tomatoes. this is going to give you a head start on your dinner. that seems easier

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so, what should you know for the week coming up? sometimes labor strikes work but sometimes that takes a lot of time. on thursday, several dozen workers from nine los angeles walmarts along with a couple hundred supporters held a strike and rally outside one of those walmarts. several dozen is not national news. anyone striking against walmart is. the striking worker said they were protesting unfair labor practices, including retaliation for attempts to organize and complaining about working conditions. other walmart workers employed in the warehouses in california have also recently struck complaining about 120-degree temperatures in the warehouse among other things. walmart said it does not own the warehouses but told "the new york times" conditions have been addressed there. we'll be talking about this again if they haven't. the next time you hear somebody demand more spending for national security. a new senate investigation

raises serious questions about what value the department of homeland security has in the effort to root out terrorist plats. the report on investigation found, for instance, syria's problems at homeland security's 72 regional offices run by local officials fusion centers, four of the 72 listed by dhs don't exist. the intelligence they gathered was described as "uneven" oftentimes shoddy, rarely timely and more often than not, unrelated to terrorism. more than than not, unrelated to terrorism. a senate report was in -- homeland security is probably the most ineffective agency in the government, adding, because he's a republican besides social security. the next debate in the 2012 presidential campaign will be thursday night featuring the vice presidential candidates, incumbent joe biden and paul ryan. i will be part of the msnbc coverage. led by rachel maddow, chris

matthews and others. when you watch this and constituent two presidential key baits, you should know what the meaning of half is. romney said the -- about half of those businesses they've supported have gone out of business. never mind that $90 billion hasn't been spent yet. never mind that only about $34 billion was allocated for that kind of clean energy business loans and never mind the energy department has only approved $16 billion worth of those loans. never mind the romney campaign said he was only talking about businesses that got those loans in the first year. never mind that only three businesses actually went under. forget all that and you're still left with the fact that most government will be on the hook for those businesses that went under is an estimated $600 million. or roughly equal to one half of $90 billion. roughly. i want to find out what my

guests thinking we should know. let's begin with jose antonio vargas. >> you should know that a full 4.5 million young americans who have a parent undocumented. when you refer to them as illegal alien. you're talking about someone's mom or someone's dad. i think mitt romney ought to know that. in some of the states, like north carolina and florida and ohio, there are enough latino and asian voters to exceed the margin of victory. using illegal alien can alienate. >> we never got to the alien part of that construction, but it's general consensus. we have total table consensus on that. brook gladstone. >> you should know about a 2006 study done about democrats and republicans and how they reason. when faced with the hypocrisy or contradictory statements of their own candidates and then given a reason to sort of think their way out of it problem, what they -- no parts of their

reasoning part of their brain lit up in any unusual way. the other parts lit up incredib incredibly. once they were done, talking themselves into the idea that their candidate was okay, they got a super shot of dopamine. so you should know that -- we are wired to lie to ourselves and as the election proceeds, keep that in mind. >> these are mris when you go in the tunnel and they scan your brain with the different colors in different parts. >> they find out you don't reason when you're figuring out what to think about your candidate. once up finish successfully lying to yourself, the reasoning parts light up again and you get a shot of dopamine. it's like coke. >> i would take a page from brooke actually. we have to realize as is becoming increasingly clear in the world of psychology that emotion plays a whole lot more of a role in our quote-unquote reasoning processes than we

think. it's in jonathan heights wonderful book. we have to apply that knowledge to the debates that we're going to see where there will be people trained to appeal to the emotions over the reasons that some of the wonkier people would run the debates. we feel rather than we reason. therefore, when we change terms, often the fact that the terms mean a certain thing in terms of reason has less to do than how society feels and maybe that's what we need to do something about. >> jonathan height has been on the phone. that's a fascinating book. i am unpersuaded by it. i want to get on the record. >> it's a fascinating book. maria? >> i'm going to throw out another term that needs to change. you should know that the next conversation is minority, which is another term that i haven't used in my vocabulary for 20 years. what is a minority? in fact, we can change the

definition of minority which is not necessarily powerless. the other thing you need to know or want to know is i'll be in tucson, san diego and albuquerque with my new pbs television pilot called america by the numgs. come see me. we'll be screening. >> check that out. we'll put that on our website. i want to thank my guests. brook gladstone john mcwhorter from columbia university, maria from pbs need to know. thank you all. thank you for joining us. we'll be back next weekend. saturday and sunday at 8:00 eastern time including tom stemberg the founder of staples, adviser in the romney campaign and nate silver, new author. melissa harris-perry is up next. the roberts court could be ready to end it once and for all. what's at stake and who is at play. that's melissa harris-perry coming up next. we'll see you next week. have a great week here on "up."

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